State Rule Threatens Women, Drugmaker Says

COLUMBIA, S.C. (CN) - South Carolina illegally denies Medicaid coverage for the only approved treatment for pregnant women at elevated risk of life-threatening, spontaneous pre-term births, the drugmaker claims in Federal Court.

KV Pharmaceutical Co. and its wholly owned subsidiary, Ther-RX Corp., hold exclusive rights to Makena, an injectable form of hydroxyprogsterone caproate, which they say is the only FDA-approved drug in its therapeutic category.

"Although the FDA-approved drug has been available since March 2011 and thousands of women in South Carolina seek treatment for this condition each year ... South Carolina has not approved payment for any vials of the medication for any Medicaid patients," according to the complaint.

"This denial of medical care to the poor and vulnerable is not only unlawful, but it is in defiance of statements recently issued by the two lead federal agencies - FDA and Centers for Medicare & Medicare Services - regarding states' legal obligation to cover the FDA-approved drug."

Premature birth affects 1 in 8 babies born in the United States and costs the nation more than $26 billion a year, according to the March of Dimes.

The plaintiffs cite a study in "Obstetrics and Gynecology" that found that though the causes of spontaneous preterm birth are often unknown, a leading risk factor is a history of prior preterm birth.

The plaintiffs say Makena is the only FDA-approved drug to reduce risk of preterm birth in women who have already had a spontaneous preterm birth.

"Preterm birth is especially troublesome in South Carolina, which received a grade of 'D' from the March of Dimes in 2011 because of its 14.5 percent rate of premature births," the complaint states. "These women and their unborn children are at significant risk of severe negative health care outcomes, and the very high costs that go with them."

But on May 18, 2011, the South Carolina Department of Health and Human Services instituted a "so-called 'prior authorization' policy that denies Medicaid beneficiaries access to this critical drug," the complaint states.

"Defendant has directed Medicaid beneficiaries to accept treatment with non FDA-approved compounded formulations or forego treatment altogether."

The plaintiffs acknowledge that the Medicaid Act "does allow states in very limited circumstances to exclude, i.e., refuse to pay for a 'covered outpatient drug.' South Carolina's exclusion of Makena®, however, does not fall into any of the narrow statutory exclusion categories. It is, after all, the only FDA-approved drug (and, hence, the only 'covered outpatient drug') in its therapeutic category. Therefore, South Carolina must make the medication available to Medicaid beneficiaries." (Citation omitted.)

The complaint adds: "Compounded formulations are not generic drugs. Like Makena, FDA-approved generic drugs are regulated to be manufactured in accordance with strict FDA good manufacturing practice standards. Compounded preparations, by contrast, are not required to be made in compliance with those standards. Moreover, as FDA has repeatedly cautioned, compounded preparations, including compounded hydroxyprogesterone caproate, have never been studied for clinical effectiveness and safety, and they lack an FDA finding of 'manufacturing quality.'"

While much of the complaint focuses on the impact South Carolina's actions have had and will have on women with high-risk pregnancies, the plaintiffs acknowledge that because they are almost entirely dependent on sales of Makena to stay afloat, the state's actions have placed them on the verge of financial failure.

They seek preliminary and permanent injunctions, claiming the state is violating drug-access provisions of Title XIX of the Social Security Act, the Federal Food, Drug and Cosmetic Act and the state's own plan to comply with Section 1927 of the Medicaid Act.

The plaintiffs are represented by Marguerite S. Willis, with Nexsen Pruet, of Columbia.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit